CSPX vs VOO: Unveiling the Best ETF for Non-US Investors in 2024

Comparing CSPX and VOO for Non-US Investors: A Deep Dive into Fund Fees and Tax Implications

When it comes to investing in ETFs, two popular choices often come up: the iShares Core S&P 500 UCITS ETF (CSPX) and the Vanguard S&P 500 ETF (VOO). But which one is the better choice for non-US investors? Let's break it down.

Expense Ratios: A Closer Look

First, let's talk about expense ratios. This is the annual fee that all funds or ETFs charge their shareholders. It's expressed as a percentage of your investment. For CSPX, the expense ratio is 0.07%, while for VOO, it's slightly lower at 0.03%.

So, if you invest $10,000 in each fund, you'd pay $7 in fees for CSPX and $3 for VOO. Not a huge difference, but still something to consider.

The Dividend Dilemma

Now, here's where things get interesting. Both CSPX and VOO are accumulative funds, meaning they don't distribute dividends to investors. Instead, they reinvest those dividends back into the fund, which can lead to compounding growth over time.

But what about taxes? Well, as a non-US investor, you'd typically face a 30% withholding tax on dividends from US-listed ETFs like VOO. However, CSPX, being domiciled in Ireland, isn't subject to this tax.

The Bottom Line

So, what does this all mean for you, the investor? Let's assume both funds have a 2% dividend yield. Here's how the numbers would look:

Fund	Expense Ratio	Fund Fees	Dividend Yield	Dividend Withholding Tax	Net Dividend
CSPX	0.07%	$7	2% ($200)	0%	$200
VOO	0.03%	$3	2% ($200)	30% ($60)	$140

As you can see, despite its slightly higher expense ratio, CSPX could potentially offer a higher net return for non-US investors due to its more favorable tax treatment.

Remember, this is a simplified example and actual results may vary based on factors such as changes in the expense ratios, dividend yields, and tax laws. Always consult with a financial advisor or tax professional when making investment decisions.

Happy investing!